STAT4 (signal transducer and activator of transcription-4) mediates biological effects in response to interleukin-12 (IL-12). STAT4 has multiple domains that have distinct functions in signaling and gene activation. To characterize the role of the STAT4 N-terminal domain in mediating STAT4 biological function, we have generated STAT4-deficient transgenic mice that express human full-length STAT4 or an N-terminal deletion mutant (Delta N-STAT4) lacking the N-terminal 51 amino acids. Whereas full-length STAT4 rescued IL-12 responsiveness, T lymphocytes expressing the STAT4 N-terminal mutant failed to proliferate in response to IL-12 and had limited Th1 cell development as evidenced by minimal interferon-gamma production. Deletion of the N-terminal domain resulted in failure of STAT4 to be phosphorylated following IL-12 stimulation despite similar phosphorylation of JAK2 and TYK2 in full-length STAT4 and Delta N-STAT4 transgenic T cells. We demonstrate that the lack of phosphorylation in cultured cells is due to reduced efficiency of phosphorylation of Delta N-STAT4 by Janus kinases. These data support a new model wherein the N-terminal domain is required to mediate the phosphorylation of STAT4 in addition to the previously documented role in gene transactivation.